In a closely-watched case, the Supreme Court of the State of Washington held today that statutes of limitation do not apply in arbitration. Broom v. Morgan Stanley DW, Inc., No. 82311-1 (Sup. Ct. Wa. July 22, 2010). In that case, an NASD arbitration panel dismissed investors’ garden-variety suitability claims against their brokers on state statute of limitations grounds. The investors moved to vacate the award, and the case ended up in the highest court. The Court first reaffirmed that “facial legal error” is one instance in which arbitrators exceed their powers and thus is a valid ground for vacatur of an arbitration award under its state arbitration statute. Next, the Court concluded that, as a matter of statutory interpretation, Washington’s statutes of limitation clearly applied only to “actions,” and arbitrations were not ”actions” as contemplated by the state legislature. Thus, the Court vacated the arbitration award, permitting the investors to have their claims heard on the merits in a new arbitration.
(H.T. to Ed Pekarek for alerting me to this decision!)
Last 5 posts by Jill Gross
- Schwab removes class action waiver from customer agreements - May 17th, 2013
- Arbitration Fairness Act of 2013 introduced in Congress - May 8th, 2013
- Tennessee court invalidates brokerage firm's arbitration clause as unconscionable - May 1st, 2013
- Added Pressure on SEC to Eliminate Mandatory Securities Arbitration - April 30th, 2013
- Rick Bales named Dean at Ohio Northern's Law School - April 3rd, 2013